RFP: Finding What You Need
Need a particular commodity or service for your business? Then sending out RFPs is the best way to go. RFP or Request for Proposal is an invitation for suppliers to submit a proposal for a particular commodity or service.
As indicated above, the selection is done through bidding. So the suppliers need to send you a proposal detailing the terms, the proposed cost as well as the policies and procedures that will be implemented.
Going through the RFP route is a lengthy and involved process. You would need to send out the Request for Proposal in advance (preferably eight to ten weeks before submission date), wait for the proposals to come in then carefully evaluate which company to choose.
But if time is not an issue, then you’ll see several advantages in sending out a Request for Proposals. First, your prospective suppliers become aware that you are in the procurement process. This alerts them that a long-term relationship may be in the offing and they should send out their best offer.
It also gives you more leverage in the negotiation process. If the other company knows that there are other companies who may give you a better offer, then they would give you the best offer they can possibly give. Also you can negotiate some changes regarding the proposals the vendor sent. This way it would fit what your company needs perfectly.
Another advantage is that it lets you reach more suppliers and gathers more responses. It also ensures the selection process is objective since you need to follow a structured process and evaluation. This is very important if you’re in the public sector, like the government.
Now in order to get the proposals, you need to send out the request first. And for you to do that, you need to know the basic specifications of what you need. A basic Request for Proposal includes service or product specification, budget allotment, timeline and the point of contact- basically what your problem is and what you need. The request could be as detailed as you need, depending on the commodity or service you want. It could be as simple as needing UPS batteries or as delicate as DNA Testing.
On the other hand, if you’re the one looking out for RFPs, then it would be best to get yourself in the RFP list. There are several ways this could be done. The fastest way is through name recognition. An established name implies the company has a good reputation and can be depended on. Another is through word of mouth. But if you’re a newbie in the business, then it would do to become a member of an online network dedicated to soliciting RFPs.
Businesses trying to work with the Government should respond to an RFP to better their chances. A request for proposal process can be lengthy but worth the time invested.